Latest PetroEcuador CEO quits, poll in dead heat

: Crude oil, Oil products
17/03/21

Shaken by corruption scandals, state-owned PetroEcuador has appointed a new chief executive, its fifth in the last 24 months. Two of the firm's former chief executives are in prison and a third fled the country.

Corruption at PetroEcuador will be one of the biggest challenges facing the tiny Opec nation´s new government to be elected on 2 April. Two leading polls show a statistical dead heat between government-backed Lenin Moreno and reform-minded rival Guillermo Lasso.

PetroEcuador´s new chief executive is navy engineer Jose Luis Cortazar, regarded as an anti-corruption specialist. He replaces Pedro Merizalde, who is being investigated by Ecuador´s attorney general for alleged perjury after his name was linked to an offshore company featured in the so-called Panama Papers, which in Ecuador´s case revealed a scheme to conceal bribes and illicit gains from corruption as well as tax evasion.

Merizalde resigned invoking personal reasons.

Cortazar served as state-owned PetroAmazonas chief executive for five months until September 2016, when he was appointed as PetroEcuador's refining manager. He previously headed oil regulator ARCH and served as Ecuador´s anti-corruption secretary.

Under Merizalde's tenure, PetroEcuador launched a plan to tackle corruption amid an unraveling scandal involving a controversial $2.3bn overhaul and maintenance of its 110,000 b/d Esmeraldas refinery.

Merizalde asked the government controller to audit more than 400 contracts signed by PetroEcuador mostly over the last five years. In that period, the firm had three chief executives: Marco Calvopina, Carlos Pareja Yannuzzelli and Alex Bravo.

Calvopina, who held the position from January 2011 to July 2015, was detained on 10 November 2016 as part of a corruption probe linked to contracts for the year-long Esmeraldas upgrade, in addition to his suspected involvement with offshore companies in tax havens.

Pareja, who succeeded Calvopina, resigned in November 2015 when he was appointed oil minister.

After a short stint at the oil ministry, Pareja resigned on 29 April and fled the country on 28 September, amid bribery suspicions and his involvement with offshore companies.

Bravo, who was in charge of the Esmeraldas overhaul and then succeeded Pareja at PetroEcuador in November 2015, resigned in April 2016 and was jailed as part of an investigation of contracts allegedly awarded to companies directly owned by or linked to members of Bravo's family and a scandal over funds held in Panama.

The three accused oil executives have not commented directly on the case, although Pareja has released videos in which he targets Jorge Glas, the powerful sitting vice president, as the mastermind behind of the corruption scheme.

According to Pareja, the scheme includes not only the Esmeraldas revamp but also a dozen oil-backed contracts signed by PetroEcuador mostly with China´s Sinopec and Unipec, which have committed Ecuador´s crude exports until 2024.

Glas oversees Ecuador's strategic sectors such as oil, power, telecommunications and mining, and is the vice-presidential pick of Moreno, the candidate of President Rafael Correa´s populist Alianza Pais movement.

Moreno won a majority of the votes in the 19 February first-round presidential election. But his candidacy fell half a point short of a sufficient margin to avoid a second round against CREO rival Lasso, a former finance and energy minister and former head of Banco de Guayaquil, who vows to reform the oil sector and attract private-sector investment.

Poll data from Cedatos and CMS points to a virtual tie between Lasso and Moreno in next month's run-off ballot.

Cedatos forecasts that Lasso will obtain 44.2pc of the vote and Moreno 42.8pc, but the poll has a 3.4pc error margin. CMS gives Moreno a 36.7pc of the vote and Lasso 35.8pc, with an error margin of 1.3pc. The polls show that many voters remain undecided.

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24/04/25

US reimposes Venezuela oil sanctions

The US' decision reopens the door for Chinese independent refiners to procure Venezuelan Merey at wide discounts to other crude grades, writes Haik Gugarats Washington, 25 April (Argus) — The US administration reimposed sanctions targeting Venezuela's oil exports and energy sector investments on 17 April, and set a deadline of 31 May for most foreign companies to wind down business with state-owned oil firm PdV. The decision rescinds a sanctions waiver issued in October, which allowed Venezuela to sell oil freely to any buyer and to invite foreign investment in the country's energy sector. The waiver was due to expire on 18 April, with an extension dependent on Caracas upholding a pledge to hold free and fair elections. Venezuelan president Nicolas Maduro's government reneged on that deal by refusing to register leading opposition candidate Maria Corina Machado or an alternative candidate designated by her, a senior US official says. The US considered the potential effects on global energy markets and other factors in its decision but "fundamentally the decision was based on the actions and non-actions of the Venezuelan authorities", the official says. China's imports of Venezuelan Merey — often labelled as diluted bitumen — decreased following the instigation of the waiver in October. Independent refiners in Shandong previously benefited from wide discounts on the sanctioned crude, but they drastically cut back their Merey imports as prices rose. Meanwhile, state-controlled PetroChina was able to resume imports under the waiver. The reimposition of sanctions this month was widely expected and Merey's discount to Ice Brent began to widen in early April, before the decision was announced. Merey's discount to Brent averaged $9/bl in March, but had reached $12/bl by the start of April and $13/bl after the reimposition of sanctions was formally announced. Buyers are expecting final deals for May at discounts of $14/bl or lower, and for prices to drop by a further $3-4/bl in the short term. Longer-term prices for Merey will be influenced by supply and prices for Iranian crude — another mainstay of Shandong independents. Venezuela's crude output reached 850,000 b/d in March, up by 150,000 b/d on the year, according to Argus estimates. PdV has begun looking to change the terms of its nine active joint ventures with international oil companies, in an effort to keep production elevated now sanctions are back in place. Chasing the deadline The end of the waiver will affect Venezuela's exports to India as much as those to China. India emerged as a major destination for Venezuelan crude after sanctions were lifted, importing 152,000 b/d in March. Two more Venezuelan cargoes are expected to arrive in India before the 31 May deadline. The 2mn bl Caspar left Venezuela's Jose port on 14 March and is expected to arrive in India on 26 April, and Suezmax vessel Tinos is due at India's Sikka port on 30 April. Separate sanctions waivers granted to Chevron and oil field service companies Halliburton, SLB, Baker Hughes and Weatherford will remain in place. Chevron can continue lifting oil from its joint venture with PdV, solely for imports to the US. Oil-for-debt deals between PdV and Spain's Repsol and Italy's Eni are expected to be allowed to continue. Repsol imported 23,000 b/d of Venezuelan crude into Spain last year and 29,000 b/d so far this year, according to data from oil analytics firm Vortexa. And a waiver enabling a Shell project to import natural gas from Venezuela's Dragon field to Trinidad and Tobago is expected to remain in place. The US says it would consider other requests for sanctions waivers for specific energy projects. It will consider lifting sanctions again if Maduro's government allows opposition candidates to participate in the July presidential election. The resumption of sanctions "should not be viewed as a final decision that we no longer believe Venezuela can hold competitive and inclusive elections", a US official says. Chinese imports of Venezuelan crude Venezuelan crude exports Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

LNG Energy eyes sanctions-hit Venezuela oil blocks

24/04/25

LNG Energy eyes sanctions-hit Venezuela oil blocks

Caracas, 25 April (Argus) — A Canadian firm plans to revive two onshore oil blocks in Venezuela, but the conditional deals signed with struggling state-owned PdV come just as the US is reinstating broad sanctions on the South American country. LNG Energy Group's Venezuela unit agreed two deals with PdV to boost output in five fields in the Nipa-Nardo-Niebla and Budare-Elotes blocks, which produce about 3,000 b/d of light- to medium-grade crude, the company said on Wednesday. The Canadian company, which operates in neighboring Colombia, would receive 50-56pc of production of the blocks. Venezuela's oil ministry declined to comment. But finalizing the contracts depends on providing required investment to develop the fields within 120 days of the contract signing on 17 April, LNG Energy said. And the signing came on the same day as the US reimposed oil sanctions on Venezuela and gave most companies until 31 May to wind down business. LNG Energy Group said it intends to comply with existing and upcoming US sanctions, noting that the conditional contracts were executed within the terms of the temporary lifting of sanctions — general license 44 — but it will abide by the new license 44A. The reimposition of US sanctions on Venezuela prohibits new investment in the country's energy sector, at the threat of US criminal and economic penalties. "The company will assess in the coming days the applicability of license 44A to its intended operations in Venezuela and determine the most appropriate course of action," LNG Energy said. "The company intends to operate in full compliance with the applicable sanctions regimes." The two blocks are in the adjacent Anzoategui and Monagas states, part of the Orinoco extra heavy oil belt. Most of Venezuela's output is medium- to heavy-grade crude. Both PdV and Chevron have drilling rigs working in those two states, in separate workover and drilling campaigns. Venezuela is now producing above 800,000 b/d, after the US allowed Chevron to increase production and investment under separate waivers. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US economic growth slows to 1.6pc in 1Q

24/04/25

US economic growth slows to 1.6pc in 1Q

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Indonesia's Pertamina to complete gasoline unit in Aug

24/04/25

Indonesia's Pertamina to complete gasoline unit in Aug

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Barge delays at Algiers lock near New Orleans

24/04/24

Barge delays at Algiers lock near New Orleans

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